ERP solutions come in different flavors, and often they’re customized to fill the specific requirements of particular industries. ERP solutions made for manufacturing companies are very popular nowadays, as they can help eliminate inefficiencies in various processes and departments. Many of these manufacturers recognize the immediate benefits and improvements brought on by the ERP accounting features.
Here’s What Used to Happen
Traditionally, sales team members drop off their sales orders weekly for the accounting people to enter into the system. This means that the folks at accounting are inundated with paperwork and emails with information that need to be entered into their accounting software and often into multiple systems.
Then maybe they will get a call from a customer. This customer may ask about an invoice that they never received. So the person in accounting searches the files, spreadsheets, and bookkeeping software to find that missing invoice.
It can’t be found, so maybe the sales team goofed. They then talk to the sales department, but perhaps the people who would know are probably out on the field. They may return later in the day or perhaps the next day to sort things out.
Here’s What Happens When ERP Is Installed
Now you have a centralized information system wherein there’s no need for accounting to manually enter the data. The sales people can do that, or it can even be done automatically when they don’t use paper-based invoices and sales orders.
The ERP solution means that the folks at accounting can now account for just about everything that they need to know about. All the departments use the same system so sales orders, invoices, emails, web store orders, and everything else is tracked—in real time.
If a customer then calls about an invoice, the accounting people can find out about its status immediately, and so will the sales team.
Crucial Info You Can Monitor
So what can your accounting people track and monitor in real time?
- They can calculate costs by any measure you may want. The costs can be counted by the hours, the quantity, or by unit.
- You can track your budget more carefully and make more accurate forecasts.
- Costs can even be more carefully balanced as time goes by, as you can scale production, inventory, and accounts payable and receivable to your exact specifications.
- You can take the cost of manufacturing and other relevant expenses to provide a clear baseline. This means you can review the expenses of your projects so that you can tweak them to meet expectations. You can now immediately find and address the cost variances (compared to the allotted budget), assess why the variances are happening, and then solve the problems before they cut into your profits.
- Maybe the system may even note that costs are cheaper than what was expected. In that case, the favorable conditions that led to lower costs can be maintained so that the lower costs become your new standard.
- Your records can help you to predict and speculate more accurately, so that you’re able to get more realistic profit expectations. You can then make informed decisions regarding how much of your resources you will invest into each project.
- Your financial reports will then become easier to understand, so that you’re able to pinpoint deficiencies and correct them. Your key stakeholders get a more transparent view of the company’s current finances, and in the future more profitable plans can be formulated.
In other words, ERP software can not only help accounting in daily procedures, but also in the long run. It’s no secret that many companies value the accounting advantages of ERP over all its other features—they’re just that valuable! They save time, money, and effort, and you’re able to do business better in the future.